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Many small victories.

Monday, July 12, 2010












Poor countries should stop giving privileges to rich foreign investors.



Getting Costa Rica to switch diplomatic relations from Taiwan to China as of last June is the latest step in Beijing’s effort to build a network of alliances with various developing countries. 
What is unclear, however, is whether China has turned to checkbook diplomacy because it wants to be kind to small, poor nations; because it is trying to weaken Taiwan; or because it fits into Beijing’s plan to gain power and influence.
On one level, China’s effort to get various small countries to cut their ties to Taiwan is nothing new.
For decades, Beijing pressured Taiwan to become a Chinese province, by – among other things - trying to isolate Taiwan diplomatically.
But by paying for roads, schools and hospitals in poor countries, Taiwan made friends around the world. 
During this time, China resented Taiwan’s success, without doing much about it. 
But that was the old China, the one without an important foreign policy.
The new China is aggressively trying to persuade various countries to dump Taipei and recognize Beijing, mainly by outspending Taiwan on high-profile local projects.
As a result of these efforts, Costa Rica became the eighth country in the last six years to break off relations with Taipei (see list below).
Two of Costa Rica’s neighbors – Panama and Nicaragua – are reportedly also thinking of breaking ties with Taiwan.
China may want to help developing countries out of pure generosity, which is always welcome.
But if Beijing is in a charitable mood, it could start by spending money on local problems, especially its own impoverished countryside, before subsidizing development in Latin America and Africa.
Isolating Taiwan makes more sense, especially when Taipei annoys Beijing – for example, by saying that it wants to become an independent country, instead of the semi-state it has been for several decades.
But Taipei hasn’t recently done anything especially annoying.
In this case, Beijing could have another motive, which – ironically – it may have learned from Taiwan, for becoming the developing world’s best friend.
China usually helps small countries.
But small countries have the same number of votes as big ones in the United Nations and other important international bodies.
Also, a little aid can be a big help to a small economy.
As a result, China gains valuable allies for an attractive price.
In return for its contribution to the local economy, Taipei never asked its friends for much more than backing Taiwan’s membership in the Food and Agriculture Organization and the right of its athletes to march with their flag in the Olympic games.
The price of Chinese aid could involve supporting Beijing on tougher issues, such as Iranian economic sanctions, flyovers of the South China Sea by the United States Air Force, or its relations with Havana (China is Cuba’s second-biggest trading partner, after Venezuela).
A client state – especially one with close economic and cultural ties to the United States or Europe - would probably refuse to support Beijing on an extreme position.
But Beijing might only ask its clients for support on modest issues, which don’t make them look too bad in Washington, London or Berlin.
A few modest victories for Beijing won’t change the course of history.
Many modest victories might.
Follow the money…

The following countries switched diplomatic relations from Taiwan to China during the past six years:

Costa Rica (2007)
Chad (2006)
Senegal (2005)
Granada (2005)
Vanuatu (2004)
Dominica (2004)
Liberia (2003)
Macedonia (01)

Fred Blaser
Chairman
República Media Group